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Facebook aims to shake up finance with its Libra cryptocurrency.

The
social network’s new cryptocurrency could fuel its e-commerce ambitions.

With Libra, Facebook is stepping into the cryptocurrency
business.
Facebook changed the way we communicate. Currently the social media giant desires to change how its 2.38 billion users think about using a cryptocurrency to make everyday purchases.

The social network and its partners on Tuesday disclosed a digital coin called Libra, confirming details of a project that had
been leaking out in dribs and drabs for
months. Libra, which will be
managed by a governing body and
be backed by stable financial assets, is anticipated to debut in the first half of 2020.

Over the years, the world’s largest social
network has allowed users to send money,
purchase merchandise from
retailers and sell their own used clothing and piece of furniture on its
platform. With Libra, Facebook is encouraging all of those activities and more.

Lisa Ellis, an analyst at MoffettNathanson research, says Libra has the potential to be
“highly” successful.
“Payments are foundational to doing commerce,” she said, “and this would be a big step toward enabling that.”
Facebook’s cryptocurrency ambitions are the latest example of the social
network’s efforts to cement itself in
the daily lives of its users. If Facebook and its partners can persuade people to use Libra, the social
network could attract
new users, keep them online longer
and generate more revenue
outside of advertising, which made up 99 of its $15 billion in
sales in the first three months of 2019.

The move also comes as Facebook doubles down on its private spaces. The corporate plans to make it possible for users to send
messages without switching between Messenger, WhatsApp and Instagram.
Calibra, the digital wallet Facebook
created to store Libra, will be built into Messenger and WhatsApp, however not Instagram at first.

Still, Facebook must overcome its image issues amid a series of privacy scandals. The social network
has alarmed lawmakers
with the amount of personal information it gleans from users
for ad targeting. Facebook says it’ll keep
Calibra information separate from social data.

How quickly Facebook can rope in Libra users is an
open question. Using existing
cryptocurrencies to pay for everyday
purchases is far from
common, despite efforts to make those
transactions mainstream. Many cryptocurrencies, most
notably bitcoin, swing wildly in value and
exist in a confusing regulatory atmosphere. They’ve been used for
speculating or in criminal activities.

Facebook and its partners, which formed a nonprofit called the Libra Association, say
they’re working to address these issues. Libra will be backed by a reserve of
assets consisting of “bank deposits and government securities in
currencies from stable and reputable central
banks.” that suggests major international currencies, like the dollar and the euro, which don’t fluctuate violently day to day.

The Libra Association is additionally working with regulators around the world to make sure the cryptocurrency
conforms to anti-money laundering rules. Getting all those ducks in a row will take time.
Facebook isn’t the first tech company to jump on the cryptocurrency
bandwagon. Line, a Japanese messaging app,
launched a digital token called Link
last year. Chinese messaging app
WeChat lets users link credit cards to make payments and money transfers, however banned cryptocurrency transactions.